‘ODA projects ignore poverty alleviation’

Published by rudy Date posted on December 14, 2008

MOST international aid assistance to the Philippines and other developing countries goes to big projects that have little to do with easing social inequities like poverty alleviation.

This is the conclusion of a new study, “The 2008 Reality of Aid Report,” that the Official Development Assistance (ODA) to developing nations merely reflects the donors’ political and economic interests that have little impact on sustainable development, poverty reduction or women’s rights.

Ibon Foundation, one of the authors of the report, pointed out that outside forces have strong influence over Philippine policies.

Ibon’s Sonny Africa cited the 2006 ODA report for the Philippines, which showed that 58 percent ($15.5 billion) were channeled to infrastructure while a measly 13 percent ($1.2 billion) was allotted for social reform programs.

“There is clear preference here. Aid is not effective when it does not address poverty reduction, creating livelihoods, hunger and lack of quality education opportunities in developing countries,” Africa said during the launching of the report on Friday.

Africa stressed that the growth of the economy, foreign direct investments and trade in the country are mere development means, not development ends.

“There is still inequality, exploitation of employees, lack of social services such as quality education and health centers and equity that is needed for sustainable development,” he said. “To achieve aid effectiveness, there should be development, and development is only achieved by protecting these human rights.”

The report said that the flawed priorities are the result of a lack of democratic and local ownership of development policies in recipient countries such as the Philippines.

Democratic and local ownership of policy-making, according to the report, is aid spending that is based on priority of the receiving country, and not of the donor.

“Aid policies should be determined by citizens, legislatures and the government to ensure that policies are made with a full awareness of the facts and the reality on the ground,” said the report “Aid Effectiveness: Democratic Ownership and Human Rights.”

Policy conditions—such as tying aid with other projects imposed by donor countries—were hit by the report as a factor that could undermine the potential for democratic ownership.

“Donors tie aid to benefit their country suppliers, link it with trade to advance geo-political interests,” it said. Lost in this power grab are the programs for health, education and gender equality, it added.

The reports recognized a World Bank observation that conditions attached to assistance programs are declining, but expressed concern that these conditions are all non-binding.

“The binding ones have remained largely unchanged,” it said. “These promote unhealthy economic policy constrictions such as privatization of essential services.”

The report revealed that since 2003, less than a third of bilateral development assistance—which developing country partners can use to meet development priorities that they have determined—has been available for actual aid.

As a percentage of bilateral aid, country programmable aid has been less than 32 percent on average since 2003, down from 49 percent in 1990.

The overall aid spending of the Organization for Economic Cooperation and Development has stagnated since 2005, according to the report, with assistance pegged at $107.1 billion in 2005 to $103.7-billion increase in 2007.

Official development assistance performance measured against the United Nations target for aid spending of 0.7 percent of the donating country’s gross national income also fell from .33 percent in 2005 to .28 in 2007.

The report called for a change of approach to foreign aid from the traditional donor-recipient power-based model to the one that sees both donor and recipient sharing responsibility in promoting the right to development.

“This set up will respond to the conditions of the people living in poverty and make donors and recipient governments accountable for their development and human rights obligations,” it closed.

The report noted that foreign aid tends to be an aid-for-trade since it is focused on export industries and international markets. From 2002 to 2005, aid for trade investments grew by 22 percent, it said.

“Aid policies should be geared on poverty reduction, defending the rights of the poor. The aid-for-trade, however, would put small and local producers, traders and entrepreneurs at a disadvantage because they thrive on domestic and regional markets,” observed the report by Reality of Aid Network.

Strong regional and domestic markets, not the trade-focused aid, are the real backbone of economic development, it said.

The Reality of Aid Network is composed of 40 civil society organizations working in international cooperation, with networks in 22 donor countries in Asia, the Americas and Africa. –Llanesca T. Panti, Reporter, Manila Times

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